Meritage Homes Corp's Stock Gaps Down to $70 on July 15

Meritage Homes Corp (MTH) shares fell 3.58% to $70 on Jul 15, down from $72.60. The stock is 34.57% below its 52-week high of $106.99 and 18.10% above its 52-week low of $59.27. Analysts forecast an average target price of $90.98 with a high estimate of $107.00 and a low estimate of $70.00, implying an upside of 29.97% from the current price.

Meritage Homes Corp (MTH) shares fell 3.58% to $70 on July 15, down from $72.60. The stock is 34.57% below its 52-week high of $106.99 and 18.10% above its 52-week low of $59.27. Analysts forecast an average target price of $90.98 with a high estimate of $107.00 and a low estimate of $70.00, implying an upside of 29.97% from the current price.

The decline in MTH's stock price can be attributed to significant new tariff threats against major U.S. trading partners. Over the weekend, the White House announced potential new tariffs of 35% on Canadian imports and 30% on both the European Union and Mexico, slated to take effect by August 1st if new trade agreements are not reached. This news sparked investor fears over rising construction costs and pressure on profit margins for homebuilders like Meritage Homes. The construction industry relies heavily on imported materials, and such levies could significantly increase the cost of goods, squeezing profitability. These increased costs could either be absorbed by the company, hurting earnings, or passed on to consumers through higher home prices, which could dampen demand in an already sensitive housing market.

Meritage Homes has a market cap of $5.17 billion as of July 2025, ranking it the 2973rd most valuable company by market cap [1]. The company has been assigned a consensus recommendation of "Moderate Buy" from analysts, with five research analysts rating the stock with a hold recommendation and five with a buy recommendation [2]. The average 1-year price objective among brokers is $97.72.

Despite the recent decline, MTH's stock has shown strong performance, surging 6.49% over the past two days and reaching its highest level since March 2025 [2]. The company's strategic initiatives, including market expansion and product enhancement, have resonated well with investors. Additionally, favorable market conditions and industry trends have contributed to the positive momentum in the stock price.

Meritage Homes' strong financial performance, with a return on equity of 14.28% and a net margin of 11.50% in the last quarter, positions it as a leader in the housing market [3]. The company has a robust pipeline of projects and a commitment to sustainability, which is well-aligned with the growing demand for quality housing solutions.

Institutional investors own 98.44% of the company's stock, with several prominent hedge funds recently increasing their positions in MTH [3]. For example, Vanguard Group Inc. lifted its stake in MTH by 96.3% in the first quarter, and Dimensional Fund Advisors LP raised its position by 93.9% during the same period.

The stock market's overreaction to news can present opportunities for investors to buy high-quality stocks at attractive prices. While today's decline in MTH's stock price may be driven by short-term concerns over tariffs, the company's long-term prospects and strong fundamentals suggest that investors should consider the potential for upside from the current price.

References:
[1] https://companiesmarketcap.com/meritage-homes/marketcap/
[2] https://www.ainvest.com/news/meritage-homes-mth-soars-6-49-strong-performance-2507/
[3] https://www.marketbeat.com/instant-alerts/meritage-homes-corporation-nysemth-receives-average-rating-of-moderate-buy-from-analysts-2025-07-08/